Starboard Puts Up Board Slate for Office Depot

The battle for Office Depot Inc. has hit a new phase of testy back and forth, with Starboard Value now saying it will formally launch a proxy fight for board representation.

Bloomberg News

The slate of four directors, which includes former Home Depot and Chrysler CEO Robert Nardelli and Starboard’s own Jeffrey Smith, will be proposed by the activists now that a Delaware judge confirmed the company must hold its annual meeting on the set date of August 21, barring certain circumstances.

Even the matter of that voting date has been something of a tiff between the office-supply company and its largest shareholder, which could signal the next two months will be a bit heated.

Starboard sued the company in Delaware on June 12 seeking a court order for a date. Five days later, Office Depot announced the meeting date. Starboard pushed forward with the suit to get a judge’s order, saying today it “could not trust the board.”

Office Depot’s Chairman and CEO Neil Austrian said late Tuesday that Starboard knew before its lawsuit that “we had initiated the annual meeting process.” Starboard said this morning Office Depot had “refused to advise” the investor on the meeting plans.

An Office Depot representative wasn’t immediately available for comment Wednesday.

Starboard will now push for its four directors, a slate it hopes will alter the board even as the company merges with its rivalOfficeMax, a deal struck in February that the activists are supporting.

Starboard has said it will remain the largest holder in the combined Office Depot and OfficeMax, and that it wants the best Office Depot representation on the board of the combined company. Along with Nardelli and Smith, Starboard has nominated former Staples Inc. executive Joseph S. Vassalluzzo and Cynthia Jamison, a board member at Tractor Supply Co. and B&G Foods Inc.

The fight won’t likely impact the merger’s closing. But expect the board fight to be central to the future of the combined office-supply company, particularly given Office Depot and OfficeMax have several key details left to be ironed out, including things like who is running the company, where it is based and what it is called.